GOP Fails To Get Enough Support For American Health Care Act

Friday GOP House leaders were unable to get the support needed to move the American Health Care Act forward.  Seeing the "writing on the wall", President Trump withdrew the AHCA and is now focused on Tax Reform.  "Obamacare will remain the law of the land", said Speaker of the House Paul Ryan.  With that said, employers with over 50 employees should continue as usual, complying with the rules, regulations and reporting required under the Affordable Care Act.  Hopefully lawmakers can make changes to the ACA helping business owners by removing fines, penalties and burdensome reporting required each year under the current Health Care Law.

Legislative Update: ACA Repeal, Replace Advances Through House

Early this morning the House Ways and Means Committee approved the American Health Care Act—to replace tax elements of the Affordable Care Act (ACA)—by a vote of 23-16.

House Republican leadership introduced the legislation March 6. The American Health Care Act was created under the budget reconciliation process and requirements and is limited in its scope to amend only the tax provisions of the ACA. It does not amend the insurance and the underlying coverage requirements of the ACA. Using this process allows supporters of the American Health Care Act to pass changes to the ACA in the Senate with a simple majority of 51 votes instead of the 60 votes needed to override an expected Democratic filibuster. 

In introducing the legislation, House Speaker Paul Ryan outlined three steps Congress and the Trump Administration will now take to replace the ACA:

1. Pass the American Health Care Act.
2. Make additional changes to the rules that govern the ACA through the regulatory process.
3. Work with Democrats to pass legislation to address the insurance elements of the ACA that need reform, which will require support of Senate Democrats in order to avert a filibuster. 

The Ways and Means and Energy and Commerce Committees began work on the bill this week and the legislation will likely change as it works its way through the legislative process.  The House Budget Committee is expected during the week of March 13 to package the Ways and Means language with provisions from the Energy and Commerce Committee, which is yet to vote on the bill. If passed by the Committees, the legislation could be considered by the full House as early as the week of March 20.

Key issues of interest to the HR profession and the workplace: 

• Reduces employer mandate penalty. Under current law, certain employers are required to provide health insurance or pay a penalty. This bill would reduce the penalty to zero for failure to provide minimum essential coverage. The employer mandate will remain and would have to be repealed through future legislation. The effective date would apply beginning after December 31, 2015, providing retroactive relief to those impacted by the penalty in 2016.
• Reduces individual mandate penalty. Under current law, most individuals are required to purchase health insurance or pay a penalty. This bill would reduce the penalty to zero for failure to maintain minimum essential coverage. The individual mandate will remain and would have to be repealed through future legislation. The effective date would apply beginning after December 31, 2015, providing retroactive relief to those impacted by the penalty in 2016.  
• Creates a continuous coverage requirement surcharge. This bill creates a new continuous coverage requirement surcharge. To avoid a 30 percent premium surcharge, individuals must prove that they did not have a gap in creditable coverage beyond 63 continuous days during the 12 months preceding coverage. Individuals aging out of dependent coverage must prove that they enrolled during the first open enrollment period after which dependent coverage ceased. The penalty does not vary by health status but would be greater for older individuals since premiums may vary with age. The penalty lasts for the remainder of the plan year for special enrollments during 2018, and for the 12-month period beginning with the first day of the plan year for 2019 and succeeding years.
• Delays excise tax on high-value health care plans. The ACA imposed a 40 percent excise tax on high cost employer-sponsored health coverage to benefits exceeding certain thresholds ($10,200 for individual coverage and $27,500 for family coverage). Under current law, the tax is scheduled to go into effect in 2020. This bill changes the effective date of the tax for taxable periods beginning after Dec. 31, 2024.
• Repeals the health insurance tax. The ACA imposed an annual fee on certain health insurers. The proposal repeals this health insurance tax beginning after Dec. 31, 2017.
• Repeals increase of tax on HSAs. The ACA increased the percentage of the tax on distributions that are not used for qualified medical expenses to 20 percent. This bill lowers the rate to pre-ACA percentages. This change is effective for distributions after Dec. 31, 2017.
• Repeals the limit on contributions to FSAs. The ACA limits the amount an employer or individual may contribute to a health Flexible Spending Account (FSA) to $2,500, indexed for cost-of-living adjustments. This bill repeals the limitation on health FSA contributions for taxable years beginning after Dec. 31, 2017.

As noted above, the bill does not repeal the ACA insurance reforms, including the following health plan requirements:

• Coverage of pre-existing conditions;
• Guarantee availability and renewability of coverage;
• Coverage of adult children up to age 26;
• Cap out-of-pocket expenditures;
• Prohibitions against health status underwriting, lifetime and annual limits, and discrimination on the basis of race, nationality, disability, age, or sex.

Since the legislation does not eliminate the employer mandate, employer reporting requirements under the ACA would not change.

-SHRM-By Chatrane Birbal, March 9, 2017

House Bill 691 another Maryland Money Grab

A bill is being submitted regarding the annual filing fees for corporations in Maryland.  Currently at $300 or less.  The bill is proposing a sliding scale fee based on tangible personal property owned by the business capping at $4,000.  Here is a link to House Bill 691.   House Bill 691   For some companies the actual fee would be going down but for a great majority, those fees will be going up.

IRS will continue to accept 'silent' individual tax returns

FEB 17, 2017 | BY JESSICA LEDONNE

Becoming the first agency to take action in response to President Trump’s executive order directing federal agencies “minimize...the economic and regulatory burdens of the Act”, the IRS has told tax preparers that it will not automatically reject individual returns that do not state whether or not the filer had health coverage.

Although at first blush, accepting such “silent” returns would appear to be a loosening of the enforcement of the ACA’s individual mandate, this is not actually a change in policy, as the agency accepted and processed over 4 million silent returns last year.

The information, coming in an email correspondence rather than a formal rule or release, stated that the IRS would “continue to allow electronic and paper returns to be accepted for processing in instances where a taxpayer doesn’t indicate their coverage status.” The email went on to confirm that this did not impact taxpayers’ responsibility to obtain health insurance or to pay a penalty, even reiterating that the ACA is “still in force” and that “taxpayers remain required to follow the law and pay what they may owe‎.” Therefore, although these silent returns won’t be automatically rejected, they may eventually lead to questions, audits, or eventual penalties.

Ultimately, experts seem to agree that the decision to continue to accept returns with no health coverage information will not have much of an impact on the ACA’s individual mandate requirements, but rather, is the IRS confirming that they will continue to do what they’ve previously done.

21st Century Cures Act Allows Small Employers To Use HRA's To Fund Individual Medical Plans

The 21st Century Cures Act, in part, has removed barriers for qualified small employers (under 50 employees) wishing to allow employees to purchase Individual health plans and help pay the premiums on a pre-tax basis.  Previously, this practice was dis-allowed with stiff penalties for those that did.  

In an excerpt from a SHRM post dated December 13, 2016 by Stephen Miller:

President Barack Obama on Dec. 13 signed into law the 21st Century Cures Act, which will let small businesses use health reimbursement arrangements (HRAs) to fund employees who purchase individual health plans on the open market.

The bipartisan bill, which Congress passed Dec. 7, focuses primarily on speeding up drug approvals and making innovative treatments more accessible. But it also includes provisions that affect employer-provided health benefits, specifically using HRAs to pay for nongroup plan premiums and ensuring that a health plan's mental health care benefits are equivalent to its physical health care benefits.

HRA Roadblock Removed

The legislation allows small employers with fewer than 50 full-time employees or equivalents that don't sponsor a group health plan to fund employee HRAs to pay for qualified out-of-pocket medical expenses and for nongroup plan health insurance premiums, including for plans purchased on public health care exchanges under the Affordable Care Act (ACA).

Federal agencies' rules, in particular IRS Notice 2013-54 and DOL Technical Release 2013-03, have frustrated many small employers by preventing them from using so-called "stand-alone HRAs" to reimburse employees who buy nongroup health insurance coverage.

"Many employers were upset when the Obama administration shut down the ability for employers to just provide money on a pretax basis for employees to purchase their own health insurance on the open market—a trend that many saw as the wave of the future," said Brian Pinheiro, chair of the employee benefits group at law firm Ballard Spahr in Philadelphia.

The 21st Century Cures Act, which incorporates key elements of the proposed Small Business Healthcare Relief Act, creates a new type of HRA—the qualified small employer health reimbursement arrangement (QSEHRA). The legislation specifies that:

• The maximum reimbursement for health expenses that small employers can provide through employee QSEHRAs is $4,950 for single coverage and $10,000 for family coverage, to be adjusted annually for inflation.
  
• Small employers that choose to provide QSEHRAs must offer them to all full-time employees except those who have not yet completed 90 days of service, are under 25 years of age, or who are covered by a collective bargaining agreement for accident and health benefits. Part-time and seasonal workers may also be excluded.
  
• Generally, an employer must make the same QSEHRA contributions for all eligible employees. However, amounts may vary based on the price of an insurance policy in the relevant individual health insurance market, which in turn can be based on the age of the employee and eligible family members, or the number of family members covered.

IRS Delays Employers’ Deadline to Distribute ACA Reporting Form 1095 to Employees

In a move that caught many in the benefits community by surprise, the IRS issued Notice 2016-70 on Nov. 18, giving employers subject to the Affordable Care Act's (ACA's) 2016 information-reporting requirements up to an additional 30 days to deliver these forms to employees.

The notice affects upcoming deadlines for ACA information reporting as follows:

• The IRS extended the deadline to deliver ACA reporting forms to employees from Jan. 31, 2017 to March 2. The extended deadline applies to furnishing to individuals the 2016Form 1095-C (Employer-Provided Health Insurance Offer and Coverage) and Form 1095-B(Health Coverage). 
  
  The Treasury Department and the IRS determined that a substantial number of employers and other insurance providers needed additional time "to gather and analyze the information [necessary to] prepare the 2016 Forms 1095-C and 1095-B to be furnished to individuals," Notice 2016-70 states.
  
• This extension applies for tax year 2016 only, and does not require the submission of any request or other documentation to the IRS.
  
• The IRS did not change the deadline for filing Forms 1094 and 1095 with the agency.This means there will be no extension to file the 2016 Form 1094-B (Transmittal of Health Coverage Information Returns) along with copies of Form 1095-B, and Form 1094-C(Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns) along with copies of Form 1095-C.
  
  Employers filing these forms by mail will still need to do so by Feb. 28, 2017. Employers filing electronically (as those submitting 250 or more forms are required to do) must do so by March 31.
  

	Previous IRS Due Date	New IRS Due Date
Deadline to distribute ACA reporting forms to employees and covered individuals	Jan. 31, 2017	March 2, 2017
Deadline to file ACA reporting forms with the IRS	Feb. 28, 2017 (paper) March 31, 2017 (electronic)	No change

• The IRS extended "good faith transition relief" for another year. In 2015, the IRS announced it would not penalize employers for incorrect or incomplete forms if they could show they made good-faith efforts to comply with the reporting requirements. No relief was available to employers who did not timely file the forms at all. Notice 2016-70 extends that good-faith relief to the 2016 reporting year. 
  
  The notice also clarified that the relief applies to "missing and inaccurate taxpayer identification numbers and dates of birth."

"The IRS announcement is welcome news to many employers still struggling to interpret and apply the IRS instructions to their reporting obligation," said Marcus Wilbers, a compliance attorney at benefits brokerage J.W. Terrill in St. Louis.

"This deadline was especially challenging because it coincided with Form 1099 and W2 processing schedules," said Mike Downey, executive vice president of BenefitScape, a Boston-based benefits services firm. "A 30-day extension, while short, moves the printing and distribution to a more opportune time."

A Second Year of Relief

Last December, the IRS gave employers subject to the ACA's 2015 information reporting requirements extra time to give these forms to employees and file them with the government. At that time, the IRS indicated it did not anticipate any additional extensions regarding ACA information reporting for future years.

Most employers and practitioners will now take advantage of the extended relief for distributing reporting forms to employees, Downey predicted.

Like last year, the guidance provides that employees can file their personal income taxes without having to attach the relevant Form 1095 to their tax returns. Taxpayers, however, should keep these forms with their other tax-year documents, as the IRS will request to view them if the taxpayer is audited.

ACA Reporting Is Still Required

Applicable large employers—those with 50 or more full-time or equivalent employees—are subject to the ACA's employer mandate and its related tracking and reporting requirements.

President-elect Donald Trump has made repealing and replacing the ACA a top priority, although the extent to which his administration and the GOP Congress can accomplish that goal is subject to debate. And while even short of full repeal the employer mandate is seen as a likely, early, target, "the ACA is still the law of the land," said Scott Behrens, an ERISA compliance attorney at Lockton Companies, a benefits brokerage based in Kansas City, Mo. "Prudent employers will want to continue to comply with the ACA, including the play-or-pay mandate and reporting requirements until formal guidance relieves them of those compliance obligations."

Small employers with fewer than 50 full-time employees are exempt from some, but not all, of the ACA's reporting requirements. For example, those with a self-insured health plan must complete and file Forms 1095-B and 1094-B with the IRS, as well as provide employees with a copy of Form 1095-B. Small employers also are required to file Forms 1095-C and 1094-C if they are members of a controlled or affiliated service group that collectively has at least 50 full-time employees.

Penalties Left Intact

Notwithstanding the extension, the IRS encouraged employers to furnish the 2016 statements as soon as they are able. Employers that do not meet the extended deadlines will remain subject to penalties.

"The IRS stated in Notice 2016-70 that it would apply a reasonable cause analysis when determining the penalty amount for a late filer," said Damian Myers, a benefits attorney with Proskauer in Washington, D.C.

"According to the IRS, this analysis will take into account such things as whether reasonable efforts were made to prepare for filing"—such as an employer's gathering and transmitting data to an agent or testing its own ability to transmit information to the IRS—"and the extent to which the filer is taking steps to ensure that it can comply with the reporting requirements for 2017," Myers noted

By Stephen Miller, CEBS

Nov 21, 2016

Medicare Part D Notices Need to be Distributed Before October 15

It is that time of year again when the annual Notice of Creditable Coverage, as required under Medicare Part D, must be distributed by employers. The notice informs participants if the prescription drug coverage offered under the employer's group health plan is considered 'creditable' or 'non-creditable' coverage. Employers who sponsor a health plan that includes prescription drug benefits must provide the annual notice to all Medicare-eligible participants. The notice will explain whether or not the prescription drug benefits offered under the group health plan are at least as good as the benefits offered under the Medicare Part D plan. The Notice of Creditable Coverage must be provided: At least once a year before October 15th (the start of the annual Medicare Part D enrollment period, which is from October 15th through December 7th). Whenever a Medicare-eligible employee, spouse or dependent enrolls in the employer's health plan (including Medicare-eligible COBRA individuals and their dependents; Medicare-eligible disabled individuals covered under the group health plan's prescription drug plan and any retirees and their dependents). Whenever there is a change in the creditable or non-creditable status of the employer's health plan prescription drug coverage. Whenever an individual requests the notice. CMS (The Centers for Medicare and Medicaid Services) has posted forms and instructions for providing this notice. Forms are available in English and Spanish. Click Here to access more information from CMS on this subject. Click Here to access the CMS Disclosure Notice.